Gov. Gavin Newsom backed off some of his proposed cuts to health care programs in a state budget deal he reached with legislative leaders late Tuesday, but California will move forward with his plan to limit services to undocumented immigrants as the state faces a growing deficit.
The $321 billion spending plan is expected to go before the Legislature for approval later this week, ahead of the July 1 start of the fiscal year. With health care costs rising faster than expected, the state economy battered by new tariffs and further federal funding cuts looming, officials confronted a $12 billion shortfall that has forced difficult conversations about California’s spending.
Officials did not formally announce the deal as they continue to haggle over the details of a provision that could streamline construction of housing projects near public transit and denser development in cities. Newsom demanded the language, which has encountered resistance from the state Senate.
“We appreciate the strong partnership with the Legislature in reaching this budget agreement,” spokesperson Izzy Gardon said in a statement. “The Governor’s signature is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.”
Though the Legislature already passed its own version of the budget earlier this month to meet a constitutional deadline, it relied more on borrowing and less on program cuts than Newsom, who sought to reverse course on recent major expansions of subsidized health care in order to stabilize California’s long-term finances.
The budget agreement foregoes or delays many of his proposals. Legislative leaders argued against prematurely kicking people out of a vital safety…
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